COUNCILLORS have warned city council officers to be 'super-cautious' after the authority agreed to almost triple the amount it could potentially borrow for property investment.

Worcester City Council wants to raise the fund it uses for property investment to £80million in a bid to become more self-sufficient and move away from relying on government funding.

The council’s development fund – which was created for property investment – was upped from £20million in October 2018 to £30million in February last year. Councillors agreed last week to potentially almost triple the fund to £80million, paving the way for larger deals and more investments.

Both the council’s authorised limit – the full amount of money with a little headroom just in case – would be raised to nearly £111 million, up from £46 million this year, and the operational boundary – the amount the council expects it needs – would increase to £103 million, up from £39 million.

The city council said it needs to find new ways of making money after the amount it received in government funding plummeted from more than £10 million 15 years ago to £2.7 million this year.

Cllr Simon Geraghty wanted the council to remain cautious with using taxpayer money. He said the council needed to be entrepreneurial, but it was not a private business and the authority needed to be “super-cautious” when spending public money in such a way.

“I understand, like many of my colleagues, the benefits of income generation and I share their ambition but the extent of the increases in the operational limit and the authorised limit, in just one year, are quite large.”

Cllr Geraghty said he wanted assurances the money, if borrowed, would be spread out so the council did not end up with too many eggs in one basket.

He said if the council did not receive as much money as it thought it would, it would certainly cause a “shock” and the impact on day-to-day services would be “profound” if things went wrong.

“At the end of the day it is debt, it is borrowing,” he said.

Cllr Jabba Riaz, chairman of the council’s income generation committee, said the increases, which still need the approval of full council, was a “bold step” and whilst £80million could seem a “very scary” figure, the council would be sensible.

He said the council would be due-diligent during decision-making and use well-thought-out strategies rather than going “gung-ho” betting millions on lucky numbers and the spin of a wheel.

Cllr Marc Bayliss, leader of the city council, was as equally as watchful about the potential for more council borrowing and debt.

“I’m very cautious about this. This is long-term debt that we are picking up,” he said.

“Thus far, the money hasn’t burnt a hole in our pockets, although, I repeat quite often, that in the first 15 years on the council our didn’t move a penny and in the last two or three [years], we’ve suddenly taken on quite a lot more.

“Thus far it has been positive. There are a couple of investments that we have looked at and passed on, which I think have proven to be good decisions because their value has fallen

“Sometimes it’s the things you don’t do as much as the things you do that you should be remembered for.”

He said there was growing expertise amongst officers and councillors, but he hoped the council remained cautious.

Cllr Chris Mitchell, who has long called for the council to find ways to make more money, was excited by the plan.

“I think if we do this properly, we can overcome some of the challenges in terms of medium-term financial planning in the future but also give us some real benefits to the city,” he said.

“It’s not going to be easy, but it is exciting.”

Cllr Pat Agar said it was a “good way to go” as long as the council remained prudent. She said the council would not be “playing Monopoly with taxpayer money” and was only finding money for the future and replacing funds cut by government.